The oncoming Omicron wave will only lock in the new realities of how we operate. Don’t even think about going back to the way things were.

I really pity the people who are still holding their breath and waiting for life to get back to normal: that glorious day when we all triumphantly return to business as usual. I’ve been struggling for a simple way — by example or analogy — to break the ugly news to them that they’re dreaming. And to demonstrate that, post-pandemic, for a variety of reasons we’ll never again look at our lives, our careers, or the world in the same way.

Not that that’s exactly a terrible thing; nostalgia and tradition are very often just bad excuses to avoid change. We’ll never progress by trying to live our lives looking backward. That’s why the car’s windshield is so much bigger than the rear-view mirror.

So, I’ve settled on single symbol: the ratchet. Not the “full ratchet,” which is a venture capital deal provision that protects early investors from later dilution, and something all founders dread. (And lovingly call rat s–t). I’m referring to a basic mechanical device that allows motion in one direction only, in a series of irreversible steps. That’s where we are today; there’s no going back. We’ve learned too much, we’ve changed too much, and we’ve seen opportunities ahead of us — both personally and career wise — that we never even thought were possible or previously imagined.

The best plan for now is to survey the landscape, note the important changes going on that will impact your business and your plans, and start adjusting, adapting, and revising your strategy so you don’t end up at the airport when your ship comes in. Keep in mind that you can learn a great deal about what’s coming from scanning — not just your industry or marketplace, but also what’s happening in other sectors as well. “Not invented here,” which rarely works out for big businesses trying to innovate, has also never been a successful approach for startups. Beg, borrow, or steal whatever works best.

Here are four big directional shifts to keep an eye on so you can build them into your own plans.

1. Forget Lifetime Employment

Few organizations benefited more structurally from the Covid-19 pandemic than the old-line property and casualty (P&C) insurance companies. They got an enormous one-time, two-fold opportunity, without any material social or regulatory consequences or blowback: to a) reap enormous profits without being subject to the typical offsetting claims, because people who weren’t driving didn’t have accidents, but still paid their full auto insurance premiums until the companies were finally shamed into giving some modest prospective relief; and b) even more important, to shed thousands of full-time, long-term employees — a demonstrably fixed and fully loaded cost — in favor of adopting a variable-cost approach, where peak demands for additional manpower would be met by third party vendors.

Many of these very traditional corporations took pride in, and regularly advertised themselves, as lifetime employers of generations of families in their local communities, even as new technologies made multiple efficiencies and increased per-employee productivity possible. As the gig economy with its variable and on-demand charms loomed larger and larger across many industries, insurers as one example saw no way to effect savings and improvements in their own bottom lines other than through painfully slow attrition. These semi-societal and “political” limitations were eliminated by the pandemic. What’s already obvious is that, not only is there no rush to rehire, but there’s also little rationale or desire to do so, for a variety of good reasons.

2. Regular Retail Is History

Covid-19 didn’t kill luxury retail — it was just the last nail in the colossal coffin. Michigan Avenue, Madison Avenue, Rodeo Drive, Bal Harbour — it doesn’t matter — they’re coming for all of you. It’s a deadly combination of three C’s: choice (the joy of infinite online inventory); convenience (the ease of never leaving home to shop for anything); and crime (the rampant looting of luxury stores by growing crowds of teenage gangbangers and professional crews of thieves). The cities can’t seem to stop it, the merchants themselves are doing little or nothing, and you have to be nuts to go hunting for Hermes when you’re taking your life in your hands.

3. JIT Means Right Around the Corner

“Just in time” inventory and parts delivery programs don’t work that well when your supply chain starts halfway across the world and your shipments are sitting offshore in a massive traffic jam while the shippers and other port gougers keep raising your fees and even have the gall to charge you for storage. Going forward, we’re gonna see a whole new emphasis on redundancy and resilience, with critical materials of all kinds localized, backed up, and readily available in real time. Parking garages, office buildings, and big box stores will all be reimagined as hyper-local warehouses for Amazon, Walmart, Costco and Sam’s Club. If you don’t have some leeway and slack built into your systems, and you somehow managed to survive this go-round, you won’t be around long in the next installment.

4. Long-Term Leases Are for Losers

Landlords, by and large, were another group that took full advantage of the pandemic for as long as possible. They were happy to accept PPP monies and blame their lenders for not making concessions and deferrals for them. At the same time, they were slow as molasses in providing any relief or givebacks to their struggling tenants. But now, because we’re closing in on two years of the virus and many leases whose end dates once looked fairly distant are now rolling around for renewal discussions, the many tenants with reasonably sharp memories of the shabby treatment they received will have their innings at bat. This is going to be brutal for the commercial real estate business.

One of my good friends recently told me that the best possible lease for any business is a one-year deal with a dozen or so annual options to renew or walk away. With the continued uncertainty surrounding the economy and the virus and with the clear and obvious need for so many firms to shrink their physical footprints as their workforce becomes increasingly hybrid or largely remote, the nature of the new negotiations is going to be radically different.

That starts with a laundry list of new demands for people who want to bring their pets to work. Then, add requests for enhanced onsite child care provisions, along with the extensive insurance, safety, security and even air handling issues relating to both kids and dogs, and you can imagine the bumpy and costly road ahead for owners and managers. To compete, landlords will also need to figure out how to design their spaces with new features and amenities in ways that will convince business owners that their location will help entice existing employees back and continually attract new talent as well.

The landlord’s traditional incentives have always been about absorbing the costs of new space buildouts and leasehold improvements on the front end and recouping them over the back end of the lease. Today, the math and the mechanics are completely upside down because so many tenants want less space and don’t want to build out anything. Instead, they want lower rents and other CAM concessions, and they will be insisting on more flexibility in terms of lease terms, options and outs. We can expect to see a rapid growth in “spec suites” for tenants to occupy on an “as-is” short-term basis while they see where the world ends up. Rent rolls, which are crucial to the landlords’ ability to secure and renew financing, are going to be considerably shorter, thinner and less substantial than ever in the past.

The post 4 Pandemic Changes That Will Change Your Business Forever appeared first on Inc.

Original source: Inc.